Debt Obligations

12 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations

Credit Facility

On October 14, 2020, Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), entered into a second amended and restated, three-year secured credit facility with a committed capacity of $625 million (the “Credit Facility”). The Credit Facility amends and restates the three-year, secured revolving credit facility entered into on May 2, 2018, and provides for an increase in the revolving credit facility from $275 million to $300 million. At closing, $325 million of new term loans were issued, with $225 million of the proceeds used to repay the existing term loans outstanding and remaining $100 million along with Essent Group cash were used to pay down all amounts outstanding under the revolving component of the Credit Facility. The Credit Facility also provides an option to increase the capacity to $775 million. Borrowings under the Credit Facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries. Borrowings accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. A commitment fee is due quarterly on the average daily amount of the undrawn revolving commitment. The applicable margin and the commitment fee are based on the senior unsecured debt rating or long-term issuer rating of Essent Group to the extent available, or the insurer financial strength rating of Essent Guaranty. The annual commitment fee rate at December 31, 2020 was 0.35%. The obligations under the Credit Facility are secured by certain assets of the Borrowers, excluding the stock and assets of its insurance and reinsurance subsidiaries. The Credit Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and Essent Guaranty's compliance with the PMIERs (see Note 16). The borrowings under the Credit Facility contractually mature on October 16, 2023. As of December 31, 2020, the Company was in compliance with the covenants and $325 million had been borrowed under the Credit Facility with a weighted average interest rate of 2.19%. As of December 31, 2019, $225 million had been borrowed with a weighted average interest rate of 3.51%.